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Ahmedabad-based Havmor Ice Cream Ltd has been fully acquired by South Korean major LOTTE Confectionery for ₹1,020 crore. The deal is likely to be concluded in a week’s time. The move marks the entry of the $80-billion food major into the Indian ice cream market.
Founded in 1944 by Satish Chona at Karachi in pre-independence India, Havmor established a strong brand presence in Ahmedabad and then expanded its network to over 30,000 ice cream outlets across eight States. Havmor registered turnover of ₹550 crore for fiscal year 2017, of which nearly 85 per cent or ₹465 core came from the ice cream business.
India’s ice-cream industry has an estimated worth of around ₹9,500-10,000 crore, of which nearly 45-50 per cent is the unorganised market. Commenting on the deal, Managing Director Ankit Chona said: “If someone takes the business and makes it grow much faster and take it to the national level, then we are happy to look at the brand going into a such suitable hands.”
“The deal includes the ice cream production facility and the employees. There will be no change in the name of the ice cream at least till the near future. For a smooth transition and hand-holding, we will continue to work as partners till a foreseeable future,” Chona told BusinessLine .
The company manufactures 150 kinds of products from two plants of which one is third-party plant. Chona, however, refrained from revealing his future plans with the funds from the deal. The restaurant business will remain with the family. The financial advisors to the deal were KPMG, alongside Veritas Legal and Dhruva Advisors LLP.
A platform for expansion
For LOTTE, one of the first Korean food & beverage companies to enter the Indian market, the deal will help in expanding its presence in the North-West region and all across India.
LOTTE has choco-pie factories in Chennai and Delhi. Last year, it had a 90 per cent share in the Indian choco-pie market. In 2004, Lotte had entered India by acquiring a majority stake in Parry’s Confectionery, belonging to the Murugapa group.
Interview: We found a right fit with LOTTE at right valuation, says Havmor MD
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